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1992 11 19CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY REGULAR MEETING NOVEMBER 19, 1992 Acting Chairman Bohn called the meeting to order at 7:30 p.m.. MEMBERS PRESENT: Don Chmiei, Jim Bohn, Charlie Robbins, and Tom Workman MEMBERS ABSENT: Mike Mason STAFF PRESENT: Don Ashworth, Executive Director; Todd Gerhardt, Asst. Executive Director; and Paul Krauss, Planning Director APPOINTNENT OF NEW CH~R~AN= Bohn moved, Robbtns seconded to appoint Tom Workman as Chairman of the Chanhassen Housing and Redevelo~aent Authority. All vote~ in favor and the motion carried. APPROVAL OF MINUTES: Chmiel moved, Bohn seconded to approve th~ Minutes of th~ Housing and Redevelopment Authority meeting dated Novem~r 2, 1992 as pre, eh'ted. voted in favor except Ro~bins who a~tained and the motion carried. All VISITOR pRESENTATION~3: Workman: Anyone wishing to address the HRA may do $o at this time. Is there anybody that would like to address the HRA? Let the record note that 3chh Dorek is in the audience and Gary Brown. Gary Brown: ...I'm dealing with the Hanus property. Robbins: Are we on tape now so we can record the Minutes? Chmiel: Yes, it's running. Gary Brown: So I may speak now Charlie? Thank you. I'm somewhat confused as to the sale of the City purchasing the Hanus property. And number one, I don't know why the City's buying it, and I guess that's none of my business. Number two, I guess I don't understand why the City is getting in the real estate business but that's I guess your folks' business. My main thing here is, and I'm sure you're aware of this, that I do have an option agreement to purchase the part that we're in which I pay towards that option every month. I pay $525.00 a month I believe it is towards the purchase price of that property. At no time have I ever entered into a real estate deal that I was going to buy that somebody else had a previous option on. So I guess I'm a little bit confused as to how this thing is all going to take place. I've .got a concern here because I stuck a couple hundred thousand bucks in this building out of my own pocket. And the reason I stuck it in there was because I figure on being there for the rest of my life. And I just don't want to be aced out of this thing so to speak. Housing and Redevelopment Authority November 19, 1992 - Page 2 Workman= I frequented Hr. Brown's establishment today due to a flat tire and having discussions with him and I asked him how this thing was going. Now ! became confused as to what was going on myself. And so I thought it might be a good idea for him to come up because he had some concerns and questions too that maybe staff can repitch what has happened. I know there's been a lot of different things going on and I thought this might be a good time to bring this all back into focus. Ashworth= Sure. I apologize for being late .... Ann Hiller. She had me on the phone from 6=30 until 7=30 talking about water in her backyard. The agreement that we entered into was one really of the HRA...so the improvements could be completed on the property. The acquisition is a discussion...have occurred for almost 2 years. Every time we went through the process and we thought we had the next hurdle taken care of, there'd be new ones behind it. The HER is aware that two of the big hurdles were recognition that Gary did have the right to re-purchase a portion of that property after, I believe from right now it's 3, 4, 5 years. A little less than 5 years from right now. As far as we can tell, that remains as a valid option. We wanted to accomplish certa£n things associated with that property and the final agreement we reached was one in which we purchase the property, keeping intact the option that Gary has to repurchase that portion of the building that he's occupying after 5 years. But with the contingent that Gary Kirt would take out our position within a one year period of time and he put up financial guarantees to insure that that takeout would occur. Robbins: Who is he now? Ashworth: Gary Kirt. And so really it's Gary Kirt that needs to continue to work with Gary Brown. Gary's got two things going. He's got a 20 year lease. So does Toll. Robbins: Gary Brown, not Gary Kirt? Ashworth: Oh I'm sorry, did I say Gary Kirt? Robbins: Yeah. Ashworth: Gary Brown has a 20 year lease and so does Toll. Gary Brown has an agreement option to take dollars that he has been putting in for rent and to convert those into an equity position in a buyout of his portion of the property. Quite frankly, all of those things going on, we didn't really care to touch the property. It was only as a result of wanting to insure that that back area was somehow taken care of from Highway 5, that we created some type of a berm or something in there. We also established covenants or other restrictions that basically would insure that they did not have continuous sales of vehicles along the highway. Those were the only two reasons that we became involved in that transaction. We only did it after we had assurance back from the City Attorney that in fact Gary Kirt would in fact be forced to p~rchase back from us after a year. There was a hidden portion there as well in that, this would help solidify the financing for Gary Kirt. What he couldn't basically do to the front door he was able to accomplish through the back door with us being kind of the financing vehicle. That's still all Housing and Redevelopment Authority November 19, 1992 - Page 3 private so the Minister's Life will stay in place. Workman: So we have nothing going on? Ashworth: We have an escrow amount that includes improving the tenant space which was an original agreement that Gary Kirt had made back to each of the tenants was never able to accomplish. $o we have $100,000.007 25 of Kirt's and an additional 75 that's put aside to insure that those improvements occur which then would include harming or whatever else. Gerhardt: Parking lot. Workman: 8ut we'd never end up owning the building? Ashworth: We own it right now. There is a guarantee. Guaranteed resale. document back to Gary Kirt. If he fails to perform on that repurchase, we take his monies that he's put up to guarantee that. Workman: Then I'm missing the relationship between Toll and Mr. Brown. With their 20 year lease. Ashworth: Those leases were originated between Gary Kirt and Gary Brown. When we came onto the scene, those were in place and we either would have to buy out Gary's interest in his long term, we'd have to do both. We'd have to buy our his interest. His long term lease. You'd have to buy out his option to purchase. We didn't want to do either of those things. Workman: Okay, so he's still on track. We've never intended, to own this. building for 20 years? Ashworth: Right. Workman: We intended to make sure that the surroundings got cleaned up and that everything would go on as planned anyway so. Ashworth: At one point in time there was consideration saying, well what does it hurt to have a 20 year ownership. There's good tenants up there. There's no need to evict them. We just want to kind of watch what's going on. But when that fell through. When we realized that we really couldn't control it because of the two leases, because of the option, we chose the later option which was get in there. Do the work but guarantee that Gary Kirt has to take us back out. $o after the one year position, Gary Brown will never know that we were in and out. RobbinG: But I think we can. Ashworth: Hide it from you. Gary and I had a similar discussion a month ago. Robbins: No, I think Gary raises a valid point. Because we've had this discussion before on the Hanus building and I think I'm on record about this started back last May or June. A variety of times about the structure of the situation. Are we in fact landlords and at the time I Housing and Redevelopment Authority November 19, 1992 - Page 4 raised a question. I don't think we want to be landlords. I don't think that's the question here. Gary's got-a business in town and obviously wants to keep something somewhere going on. And as far as, I think the intent is, I think'really what we're trying to accomplish here is just to get signage and get it cleaned up. I mean that's the bottom line here think. That's the way it sounds here. Whether Gar7 has his deal in back or Gary Kirt gives us the right to clean his outfit, what differnce does it make you know who owns it because it still allows Gary and I have to go on record as saying is that Gary Brown and I are friends too as well as with the Mayor and with Tom and with Jim and all of us. We all know each other and he knows you and knows Todd of course. This way I think it gives Gary Brown the right, yes. If in fact he wants to do anything about his personal situation, the right to do that as long as we've got control of s£gnage and cleaning it up. I think that's the intent. don't think it's who owns what or we want to be landlords...the other things we want to do. I think we intended just to make sure that Gary's happy. We're happy. Everybody's happy and everything gets done I think, isn't it? Gary Brown: I would think so...aspect that's why I'm here asking the question. So in fact. Robbins: Gary, wha~ is your understanding? Gary Brown: ...in other words, you guys do own it now? Robbins: We own, okay so we own the total building or just the share without the, being in the real estate business and the lending business as I am, we own it without the condolizing of Gary's and Toll's speculation or with it? That's a legal question by the way. Ashworth: Well that's a triggering type of a thing. $o in other words, after 5 years Gary Brown can approach Kirt and say, you'd agreed that you would sell me this part of the building in 5 years. I have that in writing from him. Robbins: From Gary Kirt or from Gary Brown? Ashworth: Gary Kirt. Robbins: Now what if Mr. Brown wishes to exercise the option tomorrow? Ashworth: That's not an option. He can do it at that timeframe but I don't think he's got a right to advance the timeframe'. Robbins: What does his lease say with Mr. Kirt? Ashworth: That's a separate document but it is a 20 year lease. $o he has both documents. Robbins: But that does give him the.Fight of buy-out? Ashworth: The lease doesn't but the other document that says that he has the right to buy that portion of the building after 5 years, that stays Housing and Redevelopment Authority November 19. 1992 - Page' 5 in effect during this whole thing. I should warn you Gary and I think I may have told you this. But I had the City Attorney look at that and I know that Brad had drafted that document as a representative for Gary Kirt but it's very difficult just to sell a part of the building'. Things are not in place from a city standpoint to allow him to do that. He should be working I would say for the next 3 to 5 years to try to perfect that thins. RobbinG: But the building can be condolized and be sold off as parcels. Ashworth: All I can relay is what the City Attorney stated to me and he said, I don't think that there's a way that Mr. Brown is going to be able to perfectuate this thing. But if the City is involved, I mean it's not going to be an easy process. There's. going to be lots of screaming before it gets done. 8ut that's between Gary Brown and Gary Kirt. Not between us. Workman: Does that...pieces together? Gary Brown: I believe I understand it, yes. I just received this in the mail this afternoon so I mean I had an hour to look at it and that was it. before I got up here. Gerhardt: I've sent Gary copies... Chmiel: Too many Gary's. 8ohn: With the HRA owning that building, we also own the Taco building, and are we going to be owning the Red-E-Mix building too? Ashworth: Very shortly. Bohn: Okay. Now the only access to that property will be from the Gary Kirt property. Ashworth: That's correct. Bohn: $o are we going to have to be part of building down to get through there? Gerhardt: ...an option.., and by Monday night you*il have an easement to go through that property... Ashworth: And there was an existing right-of-way that is also in there. I don't see any reason to ever look to removing a bay '~t hypothetically we would have that right after, before this resale triggering would OCCUr. Bohn: That doesn't effect Gary's part anyway? Ashworth: No. Gary Brown: Well, I guess it could yeah. For the fact that that's where we store our cars and stuff back there. The impound for Carver County Housing and Redevelopment Authority November 19, 1992 - Page 6 and things like that. For Public Safety of Chanhassen and things. Ashworth: Yeah, Gary has been using that area for impounding, if and when those properties to the back were ever developed and if a road were ever put through, you'd have to address the issue of does the impound function continue to exist. And if so, where. But I don't see that coming up. There is mufficient easementm with the one that Todd is talking about Monday night, to gain access to the back of that property. Between the old one and the new, 60-$0 feet. Robbins= Okay, back to the building again. If in fact this 5 year period comes in. Would it aIso allow~ is it in there where it allows if by chance that Toll or Gary Brown wishes to buy it back rather than Gary Kirt. Would that be possible? Because it's possible that they may want to buy it back from us rather than Gary Kirt. Ashworth= I don't know about the, first of all Toll is only in there as a leasee...Whether or not Gary could accelerate his right to purchase, I don't know. I could pose that question back to Walston. Robbins: I think that's an important question because that probably hinges on a lot of what we're, talking about here. If in fact it gives Mr. Brown the right to purchase or not. That's really the crux of the argument I think. Ashworth: The only thing that the attorney relayed to me was, Gary Brown's agreement to be able to purchase a portion of that building will stay in effect without purchase and our resale back to Mr. Kirt. That Gary Brown's position does not change at all. Those were his words to me. Gary Brown: In other words, my purchase agreement did not mean anything. You guys just kind of hurdled over that one and forgot about it. Ashworth: Oh no. We had to take it with us. It went with our purchase and it will go with the resale back to Gary Kirt. Wot kman: Gary Brown hasn't lost anything? Chmiel: No. Shouldn't. Workman: No leverage or other? Ashworth: Jim Walston informed me that Gary Brown's position would not change in any respect because of this transaction. Robbins: Do we have something on that in writing. Do we have that documented? Ashworth: I could take and obtain that. Robbins: I think that's obviously in Gary's interest to protect him. I feel awkward because I'm walking the local business person as well as the Housing and Redevelopment Authority November 19, 1992 - Page 7 HRA so I'm kind of edging both sides. Ail of us are. I mean it's the same situation with a lot of local businesses here. Ashworth: I have no problem requesting Mr.'Walston to put into writing that, it's two things right? Or maybe even one. Mr. 8town's position does not change one bit with the sale to the HRA and proposed resale to Mr. Kirt. Robbins: Gary, would that help you or not help you or do you feel comfortable or not comfortable or what's your position? Gary Brown: have. If it isn't a whole lot of trouble that would be nice to Robbins: Gary, I'm sorry. Gary Brown: I said if it wasn't a whole lot of trouble to get it'd probably be nice to have. Alright. I'll get out of your guy's hair. Thank you. Thanks for answering the questions. Workman: Thanks for coming Gary. HIGHNRY 5 - ~PPROVRL OF PHASE TX CONTRACT N~TH B/~RTON-~S~ ~ C~J~IROS FOR THE HIGHWRY 5 CO~ZD(O STUDY. Krauss: This was on your agenda at the last meeting. It has to do with the Highway 5 corridor planning program. This has been an ongoing effort from the city. I think we've been involved with it now one way shape or form for a year and a half. You know Jim and the Mayor and Todd have been involved with the early meetings with Bill Morrish and then that's grown into the appointment of a Highway 5 Task Force. The Mayor's appointed, I think we're up to 17 or 18 people now. We had our third meeting last week. I think we really hit the ground running with this meeting and it's moving foward. It's an exciting program. The Council, I guess the arrangement as I understood. The program was authorized through the City Council with the understanding that the HRA would be ultimately funding it because the highway runs through 3 or 4 or 5 current and pending tax increment districts. We were asked to do it in two phases. The first phase being, the first couple of meetings that we had generally which was, let's figure out what all'the issues and opportunities are. Let's clarify the work program. Let's not spend a whole lot of money at that point until we get it going. The second phase was the one that's before you now which is, the real guts of the program which is outlined in the work program that's attached here. There was some question as to who Barton-Rschman or how does 8arton-Aschman and Camiros relate to one another. One of the things we did, and we did it with the approval of the Council to save time, was rather than go through a 3 or 4 month interview process with opening up the door to request for proposals and on and on and on, we worked out an arrangement where Barton Aschman had already been working with us on Highway 5 issues. Had been working with us on design issues. Is working with MnOot obviously and a frontage road on the other project. And offered a lot of the services we needed. Now they didn't offer the whole package of services. Barton- Aschman is primarily an engineering firm. They have a fairly good Housing and Redevelopment Authority November 19, 1992 - Page $ landscape architecture. They worked with us very well in the early phases with Bill Morrish and his people in tying that together. They're not a strong planning firm and I felt we needed to introduce a good urban planning component because we need new ordinances coming out of this. We need land use suggestions and things of strong planning orientation. Barry Warner suggested Camiros and I kind had to kick myself for not thinkin~ of it in the first place. Camiros has had an office in Hinneapolis for 2 yeats now. They're working with Minneapolis on redoing their Zoning Ordinance and several other projects. They're really based in Chicago and what made me kind of kick myself for forgetting it is I had been to a conference in San Francisco on urban design that was given by one of the principals of Camiros and have since, I brought them up here to speak to the Planning Association at recent conferences on urban design because they're really innovative in that area. And they bring the expertise that we needed for that kind of urban design focus. $o we had Barton-Aschman and CamIros joint venture on the project. Barton- Aschman is the nominal contractee and Camiros is a subcontractor to Barton-Aschman so we're only getting one bill in essence. But that's the arrangement that was set up. In terms of the dollar cost, the dotlar cost for Phase ZI is $51,500.00. It's a fair sum of money but I'll be honest, I mean this is, even if we go back a year, and I think Mayor, you asked me what I thought this whole thing would cost and I kind of threw something on the table. I said ! don't know, $55,000.00-$60,000.00. It's going to be right in that range with the Phase I and Phase II. It is a very intensive work program. They are doing quite a bit for us. I think 3im at the last meeting you saw the kinds of things that are being produced and I think we're real excited about where this program is going. Chmiel: If I could just interject. With Barton-Aschman, Barton-Aschman has been, as you indicated, tied in with the Highway Department and by having those two together, Barton-Aschman still has to be there so we know what the Highway Department's thinking so we then can tie in accordingly with Barton-Rschman and they comthg back and informing us, although there is one bill as Paul said. It's not going to be exceed, or I shouldn't say exceed. The bill is not going to have two sides to it. 51 here and 51 there. It's just a straight 51 for one individual. Robbins: I would move that we accept item 3 as stated that the contract. Chmiel: I'll second that. Workman: ~ny further discussion? Robbins moved, Chmiel seconded that the HR~ approve contract funding of $51,500.00 to complete the Highway 5 Corridor Study. All voted in favor and the motion carried. CONSIDER TAX INCREMENT PL~ AMENDM~T~, Ashworth: Didn't I just put the copy of the letter that I had sent to the School? Chmiel: That's right... Housin~ and Redevelopment Authority November 19, 1992 - Page 9 Ashworth: This comes from our meeting from a month ago where both the School District wasn't in but I had disclosed to the HRA their concerns. specifically associated with the new school referendum and the concern as to when districts would expire and being able to coordinate the expiration of those districts with the school referendum and also State laws as they deal with excess levy dollars and whether or not the cities ct Chaska and Chanhassen would be in a position to release a portion of those dollars earlier so as to again help relieve some of that school problem. Before we can modify our plan we need to send copies down to both the School District and the County and as I had pointed out in my report from a month ago, the first question that both the School District and the County are going to ask me is, when is your existing district going to expire. That gets back into this issue that for years I've been telling them, '95-96 and at this point in time we're talking about extending it and carrying it through the year 2000. Being able to carry out local projects. I'm quite sure that they will be disappointed in that news and that's why when we had started.meeting with them, talking about well are there other ways in which, that all parties can literally be a winner? Where rather than the city giving up this 40~ of these dollars into a fiscal.disparity POOl, losing $800,000.00 on fiscal disparity distribution, is there not a way by which we could continue to do our project and still make you people happy. That's where we came back to the position of potentially modifying the 'plan to include construction of county roads within the city of Chanhassen. They'd have to be within the district. By the way, that all wouldn't come out of this particular district...strong likelihood of a third. When Opus comes before the City Council with their request to subdivide the property lying east of TH 41. Between TH 41 and CR 117. Anyway, so as to avoid a potential problem with the'County and the School, I drafted this letter where I suggested that if in considering those plan amendments, or the Plan amendment that would literally carry this through the year 2000, if they would do that but do it under the understanding that the tentative agreements that we've kind of reached would in fact be put in place either now or at least give them some hope that they in fact would go into place. So I don't know if I acted right or wrong... Workman: Ne don't have any action on this? Ashworth: But I wanted you to be aware that I was notifying them. Again you're fully aware that the Target closing did occur. You're probably not aware that they delivered a check to my house last Tuesday night. $1,686,000.00. Workman: You move down to Brazil? Ashworth: be Don. It's spelled wrong. It said City and I said it's supposed to Robbins: But back to the item though. I would also think you want to tell Dave Clough that we endorse it. To provide a positive response. I'm on the Advisory Task Force for the School Board so I would think if you could provide a positive response for this. Housing and Redevelopment Authority November 19, 1992 - Page 10 Ashworth: If they can continue to receive postive reactions from Chanhassen and Chaska, it's going to make a significant difference on this proposed bond sale. I mean first of all you're talking about $50 million. But I can tell you, the combined work that we have done, the initial draft had that as a $450.00 increase on an average valued home, well they had an average house as $60,000.00 or $80,000.00. I told the ~uy from Springsted, where do you find that house. $60,000.00 isn't average. But anyway, they have it up to now $150,000.00 home will see about a $140.00 decrease in 1993 with a $210.00 increase in 1994. It will stabilize from there on out. Their job is going to be to convince the voters, first of all convince them that the $140.00. They've really got it in their pocket. Secondly, you know think about using those' dollars. I mean from where you're sitting right now, if you approve this referendum, it's going to cost an average, 1~0 is maybe a little on the high end for our homes in Chan but it will cost about $60.00 to $70.00 more than you're paying today. The problem is, most people will take that $140.00. They'll forget that it was reduced the $140.00. Another trick is, the truth in taxation notices will be, you will receive those within the next week and so the Don Ashworth prediction of that $120.00- $130.00-$140.00, feel free to give me a call and say, you dope. Mine .just, I think you will find that the numbers will be about what I'm giving. Bit of caution and that is, for people living in the Minnetonka School District, and Councilman Dick Wing should be closing his ears. The referendum that was approved in the Minnetonka district and now the debt service associated with that will chance their's from 64~ up to 77~- 78~ so they're going to see an approximate 13~ increase in addition to 2 from the County so. Workman: 77~ meaning the School District's share? Ashworth: Yeah. That's like ours is 25~, the County is 40 somethin9 and the School District is 60 something so the total is like, was 130. How you ~et more than 100~. So for those homeowners, they will see some tax class reductions and so a lot of the homes in the Minnetonka district are more expensive homes. The $150,000. to $200,000. bracket. The formula change for those types of homes will produce about a 12~ to 13~ decrease. And so the 15~ increase, we probably won't hear from those people during the truth in taxation hearings. It will look to them as though it was about the same. They just didn't know what they could have had. Workman: You know we're showing the spirit of cooperation in all this with the School District and the County and everybody else and might not, our local editor doesn't get here very often but it might make for a well deserved story. Gerhardt: This will be back on Council and the HRA agendas for approval a.~ain... Workman: Make sure that he understands. Ashworth: And I did put it in the Administrative section for this upcoming agenda but you're saying to me that you think that maybe I should ~ive him a call? Housing and Redevelopment Authority November 19, 1992 - Page 11 Workman.' Or send him this letter. Ashworth: I've been fearful to do that until there was final action by the HRA or council. Workman'. Yeah, but I mean it's going' to happen-. Chmiel: Yeah, but it could change in some ways and it'd be best that once it's finalized...and I'm sure it's going to go that way. Workman: Because the HRA doesn't often get, you know and a guy like Gary Brown kind of epitomizes that. Like what are you guys doing. A little suspicion there so we can get a little good press, why not. Ashworth: Just have suspicion of legislators. Workman: Well, if that's aII you have on that, we'll move on. Chmiel moved, Workman seconded to approve a Resolution approving Modification No. 12 to the Redevelo~Naent and Tax Increment Financing Plan for the Chanhassen Downtown Redevel~ment p~oject. All voted in favor and the motion carried. DISCUSSION OF 1993 BUDGET. Gerhardt: At our last HRA meeting I handed our a preliminary budget for all HRA members to review and ponder over the last month. I received the revenues side of it and on the back side you have the'expenditure side. No real drastic changes overall. You know promotional expense. We continue to expand on our 4th of July activities with the hotdogs at the picnic and promotional expense associated with Market Square-Grand Opening. The Art Festival. It seems that the HRA should take more of a role in trying to promote activities in the downtown and assist in marketin~ those efforts in ways of drawing people to the downtown and to shop here. Office equipment. Again, we're looking at always to upgrade our computer operations here, similar to what we did last year. If there's anything that you have in mind that you want to try to accomplish, we've got our overall capital improvement goals such as the Park out front. The library. The potentia~ senior housing. Capital - ~ro.jects. We would bond for those. Those aren't included in your operational budget. These are what I would say are some of the smaller dealings you know. Bohn: With the library project, are we .going to purchase the Barnes- Klingelhutz property? Gerhardt: We're working with Mr. Farmakes in finishing out the details of his drawings and trying to lay out that area. I know Jeff has met with Mary from Carver County, librarian and he has done some detailed surveying in the area to try to fit his building in there. Right now we're trying to get a handle on what the County foresees this library being. It's pretty clear that they want to be a one story facility. They have needs of 65 parking stalls but Mary is still somewhat up in the air. Housing ~nd Redevelopment Authority November 19, 1992 - Page 12 She was talking about how this library would operate into the future in Chanhassen and I think the next step is for Mary to make a decision and then bringing Mary, Don, Strgar-Roscoe and sitting down and finalizing those plans and bringing them back to you to show how this area might be developed with the library. Chmiel: Just a quick question in regards to that. Have we discussed this further with the Library Soard? They took the position that they'd rather be located over on 79th Street, adjacent to the shopping area now, which they mentioned before. Has that been turned around? I know I have had discussion with some of those members and told them where I thought we were really coming from and that we still look to this particular piece of property for the library. Gerhardt: The only thing I'm aware of is that 3elf took his concept plan and met with Mary and Mary told him that she would be looking at at least a 15,000 square foot facility all in one story. Rnd the site that he was promoting was the Pony/Pauly/Pryzmus/Klingelhutz/Barnes area. And in that would have the acquisition of the Barnes/Klingelhutz property. And Mary gave him some more details on the plan. She was looking at some lon~ range efforts of the library and I had discussions with her and she wanted to talk more in detail with Don. I don't know did she ever... Ashworth: No, because again 3elf's plan has to be done in more detail so you know how many parking spaces you have there. How access would be obtained. We've encouraged him and I think that he has had one meeting with their library consultant so you can get some ideas at what shape they'd want this library in. And I know that he's been getting or oetting for him the base map so he can actually draw in the parking lots and what not. But like Todd said, he has met with 3elf a couple of times but it's not moving too fast. Robbins: With regards to that, let's assume that the library says no. We don't wish to relocate it. We'll go elsewhere. Would the building still be constructed and used for pure office space without the library in there at the Pony/Pauly/Pryzmus/Klingelhutz/Barnes? In other words, would the, the way the building was drawn now with the one that Jeff is doing, whether the library's in there or not, would that still occur? Ashworth: I don't know what you'd use a str.ucture for if it were not for a 1 ibrary. Robbins: Office space because at one time there was a plan to show there was going to be an office building in there. For office space and now it's more, I agree it's more decorative. So office space and at one time we had talked about that being an office complex. So it's still possible That could be used for office sans library. Ashworth: The County policy is one in which,, if a city within Carver County will provide space for a library, that they will, if it's within their budget, occupy that space and provide the books and personnel. The policy really doesn't give them the option to take and say, how big it's ~oin~ to be or what color it's going to be or where it's going to be. As a courtesy I'm sure we want to take and do all of those kinds of things. Housing and Redevelopment Authority November 19, 1992 - Page 13 But * ~ ~ ve got to believe, if you buiid them a building and you say you want them to occupy that buiIding, they w£II occupy that buiIding. Gerhardt: I think what Charlie's point is is, if the library decides to no over on Market Square, would we go over there and build an office Duildin~. Ashworth: But they can't. See that would violate the County policy because the County is not out building. Robbins: But we could still build a building there. We could still build an office complex there. Gerhardt: We couldn't build an office. Robbins: Somebody would. Ashworth: You'd have to build it as .a library and then say, cops. Nobody occupied this. We'd better take and lease it out. Robbins: But that could happen though. Ashworth: Yeah. Workman: We've got to have our ducks in a better row than. Chmiel: Yeah, although I don't think that they would move into that particular direction. Robbins: But at one time there was a plan of where there was going to be an office building over there without a library involved. Workman: Didn't traffic dictate, and the oddity of that corner dictate that that wouldn't...big, big traffic? Gerhardt: We had concepts for retail, office. Just leaving it as a park. I think they were all presented to the HRA. Robbins: That's the original question. That was really the point of the question because are we still going to proceed anyway regardless of what the library does? Gerhardt: There's so many other amenity parcels available right now for office you know. This would probably be a choice but not the first choice. To build an office building. Robbi ns: 0 kay. Workman: The only thing I'll add to that discussion is I've had some ~eople concerned that we're going to build a park here and then we're ~oin~ to have another park down there by the library. It's getting to be a lot of park. Housing and Redevelopment Authority November 19, 1992 - Page 14 Asnworth: ...Todd's discussion on the budget as we're going through it. It should, the HRA should realize that your budgetary, process is different than that let's say of the City. You're involved with projects so you decide we want to do a project, we're going to do the project in front of here. You'll end up bonding for that so you'll set the amount of dollars that are necessary to do this project or to make Rosemount happen or to take and do the library or to take and be a part of the Target thing or whatever else. You end up bonding for that and really most of your operational levies are going to pay off the projects that you already have underway. $o there's not really very much stuff I'll say that's out of your current operational budget. Most of it is in pawing the cost for each of these projects that you've already done. Maybe I've made things more confusing than helpful but I mean that's why you have such a big listing under that budget portion for the, he doesn't even show it. Yeah, transfers to debt service. All of those were various pro,iects that you got involved with. Robbins: Just to ask a layman's questiop on the, because the way it's ~ro..jected as a budget. It says '92-93. One question is, is there a document we could correlate with this that' shows actual has been spent? Gerhardt: The idea estimate of '92 will show pretty much the balances. Robbins: Let me just go through the question here. To show an actual because I've got an accounting background. $o you've got budget versus actual expenses. Then secondly, do we have a separate, for lack'of words, checking account or just an account that shows dollars that we have or what our P and L is or our balance sheet? Do we create one of those? Ashworth: You are a separate fund. Robbins: Because I've had people ask me, how much' is in the HRA checking account, as an example? I don't know. Is it $1.007 Is it $5 million? Or what? Chmiel: Put a few O's behind it. Robbins: But I think that's a valid question though because the fact that, I mean we are taxpayer money here so we should be able to see what we have. Ashworth: If you would like, we do monthly budget reports that include the HRA. We have for the last 10 years but I mean, I guess we haven't included those. Robbins: So it's something that's, I shouldn't say readily but it is something that if a person asks, they could ask and say what's in the account as of date or what's your profit and loss or whatever? Gerhardt: You see the expenditure side of each of the budgets because you approve all the bills. Robbins: That's the expense side. We don't see the revenue side. Mousin~ end Redevelopment Authority November 19, 1992 - Page 15 Gerhardt: The revenue is done twice a year. chmiel: Charlie, I've gone through that same process wondering and I've .~one in and looked at it and it's available. Robb±ns: Okay, I just asked. Workman: Can you maybe highlight that for us at the next meeting and show us if we're investing or what we're doing? Gerhardt: I'll put a month to month together. Whatever we have in there and then I'ii give you receipts for the first half and we should have second half. Asnworth: We maintain for the HRA detail budget reports, summary budget reports, detail subledger on expense, detail subledger on revenue, general ledger, all general ledger balance accounts. You're included as a part of the annual audit so the records of the HRA are audited by Deloitte. They make out the subsidiary statements verifying that all the records are accurate. You have a vendor analysis for the HRA. Receipt re~ister for the HRA. Robbins: So the numbers are there then? Ashworth: Yeah. Robbins: Okay. I think it just might be interesting to see them, personally on a quarterly basis of what our revenues to date, budget, expenses to date. Very general. Nothing really detailed. As more of a ~eneral p and L and a balance sheet item. In other words, quarterly statements. No more than a lender would ask. Ashworth: We'll include the B & R's in the next one. We'll also include then a copy of the 1991 year end audit report as it deals with the HRA accounts. Gerhardt: Within this budget it shows you up above what you're going to Aet in increment and that 460..., that's the revenues that you collect every year from the tax increment receipts. $4,600,871.00. Those were your collections in revenues from the tax increment district. Interest earnings, $50,000.00 off of that and then down below, you're going to have expenditures to pay off the special assessments of $1,172,817.00. And then you add all these other ones down there and you've got $4,914,840.00. So what it doesn't show is cash... Workman: What is the total transfer number then if it's not You've got the $3.7 there below it. What is that, a subtraction? "hmiel: Yeah Workman: I see the revenue. Chmi~l; What you're saying is under the budget in itself. Take '92 at the bottom Prior to the transfers. Housinn and Redevelopment Authority November 19. 1992 - Page 16 Workman: Maybe I can move up to the top. Gerhardt: You can take the transfer to debt service away from this. So rheem numbers from what is the $1,172,817. these are all totals. Ashworth: The $3.7 million appears to be a bad number to me. I would say it totals the $4.9 million. Because if you started, if You have a fund balance forward of $1.1 million, you're bringing in $4.2 million so that's $5.3 million and you're ending up with $500,000.00 as a reserve. Zero balance. That means that your total expense has to be the $4.9 million and not the $3.7 million. Robbins: The way this is structured, the way I would look at it is that transfers to debt, we're paying off obligations. So technically have that as an expense so that should come under the expenditure column rather than being another category. Ashworth: Governmental accounting typically have your transfers in and out as a separate category. Revenue expense transfers in and out. Robbins: Yeah, I'm just looking at it in pure numbers. We take in some money. You pay out. I don't care whether you pay it out on debt or you may it out on buying Christmas trees. It's still an expense. Ashworth: It's still an expense but if I were to check with Tom but my, I would have the tendency to just scratch out the line that says $3.7 million because that appears. RoDbins: Yeah, because that doesn't mean anything.' Workman: Okay. Any further discussion on this exciting stuff? 8chh: Does this '93 budget include the Red-E-Mix building? Gerhardt: That again would be a capital project so, no. 8ohn: Same thing with the Pauly Road extension? Ashworth: Typically a project that you authorize, once it's' actually kind of accomplished, you won't see that as a transfer until probably two years later. So we would authorize the coordination of the cooperative a~reement with Highway 5 and that was, the agreement was from'more than a year ago. Work was done during this past year. It was included then in the last bond sale. That was one of the items in there and the first debt payment on that will not occur until 1993 or '94. TI .bonds taxable. That's not even shown so that one won't show 'until 1994. That's the first time you'll see that and then you'll have TI bonds of 1992. RoDbins: Would that also be the same rational as any property that sold in the 8usiness Park? That's been changing hands in '92. That's going to be effective '93 or '94 so it won't show up here? Ashworth: There's a lag.in the receipts in a similar fashion.. Housing and Redevelopment Authority November 19, 1992 - Page iF Robbins: That's the point. Is that it won't even show then? Ashworth: Yeah. Like Rosemount was built just like your house or mine. It has a delay in that receipt. Robbins: Do we need any action on this or do we just approve it? Gerhardt: We will have another meeting in December. If you feel comfortable with it tonight, sure. Approve it. If not, it will be back on in your December meeting. Robbins: What could we change? Gerhardt We could get you some of the information that you had requested. If you feel more comfortable in approving it or you can approve it and we'll still get the information. Workman: I'd say let's wait, as long as it doesn't matter. Some of these numbers don't match and I'd feel more comfortable. Chmiel: I've got one quick question too. I always have quick questions. ]'hat special assessment reduction really, debt service as we've had it for ~4,172,817.00. How many more years is that going to take before we come back down to a zero? Do you know? Ashworth: -That is buying down the assessments again on a lot of these pro.iects. Some of them, like the original Business Park I believe were. Gernardt: There's 2-3 years left on Chan Lakes. Ashworth: Chan Lakes Business Park? The ones let's say for Rosemount, Empak, Lake Drive, that was an 8 year so in about 6 years. What I can do is I can give you a copy of the schedule. So in other words, for each one of those business, for each year that we've taken over that assessment, we show each one of those. Then the timeframe and you kind of run these numbers out. Here's the total for '98 and '99. Gerhardt: I mean if we didn't do another project, we'd have enough revenue by the year 1996 to pay everything off. Ashworth: Well not with what has been approved during the course of this past >'ear. We've literally... (There t,Jas a tape change at this point in the discussion.) Ashworth: ...You're really very limited in terms of your caiptal expense. So you know if we had to go through some real gyrations because we needed an articulated snowplow to take care of the downtown area, and that's not the type of thing that's really covered under Statutes so we had to look at another means by which we could basically get that taken care of. One of the reasons that everything that you do is kind of as a oro.]e=t expense is to insure that it gets into your tax increment fund. That the attorneys have approved that as a valid expense and literally in bonding for it you're assured that.everybody has said yes. This is an Housing and Redevelopment Authority November 19, 1992 - Page 18 item that the HRA can spend their dollars on. $o that's the reason it's kind of handled as a project kind of thing. 8ack to your question' though. If the HRA had some specific things that you as a group could say well. we should really be doing, even if you tell me that, we should De doing whatever. I would still suggest then that we do it as a project that you identify in your plan. You don't have a whole lot of discretion. ?~oDbins: Back to that. With regard to the Pony/Pauly/Pryzmus building. When do those leases expire on Pauly, because I believe was it in '93 or ~947 gshworth: July of '94. Robbins: I'm sorry Don.. Ashworth: Todd just corrected me. To May 1st of '94. Robbins: So we don't have to worry about '93 at all then? $o in '94 then things happen someplace. Would that be something we'd want to put in to be a capital expenditure to do research or to do anything or do we have to do anything on that on legal fees or does that start at expiration? I'm using legal fees as an example but to do any more exploration on that property? Do we have to do anything? Ashworth: Well, our position has been to. Rombins: Expense side wise. Ashworth: Try to get Jeff to finish up-his plan and re-present that. Is this what you want to do? We saw that at that Point in time we re-present it. You tell us yeah. That's what we'd really like to do. Or if at that point in time you'd'say, gee I'd like to see some other alternatives. That would be the timeframe that you would authorize whatever happens to be. Go out and find another architect. Give us a fourth opinion as to what we should do with that piece. See there again, you've ~ot more latitude because once you take on a project, it's even like this front, this City Center Park. As a bondable cost that's going to occur at some point in the future, we're identifying it as a plan amendment so that everybody knows that's something we're going to do. But as a pro.ject you can legally have legal expenses associated with your ~ro.~ect so you accumulate all of those. And have certain engineering costs and right on down the line. Those will all tag right along with that pro.~ect so when you finally bond for that project, it's included. Ail the administrative expense. Engineering. Legal right on down the line. RoDbins: I move tabling the budget until the meeting in December. Workman: Is there a second? Chmzal: $o moved. Workman: Any further discussion? " !--lousing and Redevelopment Authority November 19, 1992- Page 19 Robbins moved, Chmiel seconded to table the 1~ budget for the Housing and Redevelopment Authority until the December, 1992 meeting. All voted ~n favor and the motion carried. ~EQUEST FOR ASSISTANCE FOR LAJ(E SUSAN A~ LA~[ SUSA~ C(~PfUNITY PARK. "'shwor t h -~ huntin~. Todd Hoffman is not present this evening. I think he's out Gerhardt: No, he's at a 3 day conference in Rochester for the Park and Recreation. >.'.orkman: It looks like he has a representative here though. Gernardt: No, Planning Commissioner. I'll represent Todd. Todd Hoffman~s requesting assistance from the HRA. I handed out tonight a letter from the DNR and some of the local residents of the Lake Susan area and their needs and wants of an aerator on Lake Susan to make sure that the lake doesn't freeze out again this year. I think Todd listed in his memo the years that the lake had frozen and cut off all the oxygen supply to the fish, and it was several years in a row. This past year the City and the DNR completed a boat access to Lake Susan. With the construction of that boat access, the DNR went out there and put in, did they say how many fingerlings. Walleye fingerlings. He gave away the walleye lake that city employees have been out there working on. But it bas real potential of having some real nice walleyes next year. There were some fingerlings planted 'or stocked there this last year and the bio,est fear that we have right now is that the lake would freeze over solid again this year and those fingerlings would die. Todd had made a~Plication with the DNR to, in hopes to get an aerator through a CORE. Coo~rative Opportunity and Resource ~rant, and were unsuccessful in ~ettin~ that. They had cut their funds. This is one of the programs that they cut into. We're really down to the last couple of days here to ~et that aerator in place. So the lake's going to be frozen and you have your backs uo against your wall here. Chmiel: Mr. Chairman. Norkman: Mayor Chmiel. Chmie!.' Just plain John Doe. In lookin~; at this thing in the entirety and tbs amount of kills that have been present within that lake from 1974 and not necessarily every year but it's close to that, through 1990. It appears to me that because of the size of the lake, as small as it is, some aeration is going to be needed within. My only concern is with this aerator is that it is able to take the water from the upper portion of that lake rather than down below, to eliminate any stir of the bottom of t~at lake and could cause some given problems. So hopefully that aerator that's .~.oing to go in is the proper type of aerator for that lake and not causin.~ any real problems for the fish. Because as it shows here. we're $0,000 walleye fry and 5,300 bass fry put into Lake Susan. A fish fry is no more than a half inch in size after they have bee~ incubated and born let's say. And so with that I think that, as the~'ve indicated there is a ~reat reduced number of predators within that lake which would kill off Housin~ and Redevelopment Authority November 19, 1992 - Page 20 all :nese fish. In order to make that a good fishing area I would' ~ungest that we provide an aerator for that and I would make that into a motion. But knowing that the cost involvement in this has not been indicated, I'd like to know, do we have any idea as to what that aerator cost would be? Gernardt: Todd put in there not to exceed $25,000.00 to bring elect!-icity. C:hmiel~ Right, that's in his last paragraph. Gerhardt: To bring electricity down, installation of the aerator and so I thought that aertor itself was somewhere around $15,000.00 to $i8,000.00 and it was like $5,000.00 to $7,000.00. Ashworth: I think it's got to be closer to 25 for just the aerator. The electricity is down there. I realize that they've got to get it out into the water and so there is some additional but I mean they've actually got the transfo~'mer or whatever it is down at the lake. It will have to be under 25. If it exceeds 25, you have to go through the formal bidding process and you can forget it. So if you make your motion to not to exceed 25 and it may be good. Chmie~ ~: That it not exceed $24,999.00. Bohn: I'll second that motion. Chmiel: Mw other concern is, do we have any other lakes within the city that has had fish kill as greatly as what we've had at Susan? I'm tninkin~ that if we put one here, the adjacent residents in the other areas could be requesting the same thing. ~shworth: The only difference there is this is kind of like, LuAnn wanting us to fix up Chart View and we say, well the line of the district ends here LuAnn. We can do the stuff inside of the district but we can't no over and do your street. Chmiel: Thank you. That's what I was looking for. Okay. Workman: I'm seeing in the Chaska paper that I get every week that they've got a lot of warning advertising going on. This is another cost about omen water. I don't know if the Park and Rec, has the Park and Rec gone over this or is Todd kind of going around them briefly? 8ecause I know when we talked about that million dollar deal 4 years ago on the chain of lakes, and they were going to put aerators in Lucy'and open water and the snowmobiles and the safety and everything else like that, that's where the Mayor's concern'about what kind of aerator used might have some impact. So I don't want to be too hasty about pioneering if it's noing to cause us some sort of other liability but if we went over to Aeration Industries over there and used their's, we'd"have a whole lake that would be in real tough shape~ . Ashworth: Todd seems very, very knowledgable in this area. I've quizzed him on some of those same type of things. He's given me responses Housin~ and Redevelopment Authority November 19, 1992 - Page 21 that... What I would suggest is you add onto the motion, and it may be Tom. it may be Don. Whomever but that a HRA member talk with Todd and ~ei that he really has thought out all of the potential liabilities and that you're not going to have those associated with the one that he's ~%'omosin~ to put in. I think again if you would put that into your motion and I don't know who feels most qualified from the HRA level, but sp~ndin~ 10-15 minutes with him I think would really alleviate your concerns. WOrKman: Maybe 3 hours with Eric Rivkin. He taught me a lot. chmiel: I'd be more than happy to have discussions with him on that but There are some liabilities that I can see that we're going to have to most in and adjacent to that lake regarding snowmobiling. Gerhardt: I think we're going to have to put more than just posts. I think we're going to have put some kind of fencing or something. Asnworth: The way he explained it to me is that these new aerators, that it's a very defined area that is going to be kept open. Such that you can !zterally post that edge and feel relatively assured that it will stay there and that's exactly where it's going to be. Chmiel: We have had liabilities with one of our generating plants from ~orth~rn States Power in posting because of the water coming back from the nenerator and going back into the river with heated temperatures. It omens the water and keeps it open and often times, even though you post Zt, someone still goes through. My suggestion would be with this aeration with the circumference of what that might be within the lake. it's not going to take care of the entirety of the lake. It's just goin~ to mrovide a certain amount of oxygen to get back down to the water. So if we were able to post and put something in and around that circumference, that may be one way to alleviate that ~iven problem. Ashworth: And Todd assures me that that can be done. In fact, if there's kind of a liability. It is such a defined area versus some of these older ones that I guess really messed up like the whole lake. But ~t's a very defined area and you're going to find that the fishermen .just love that because this is open water and it's a defined area. You can ~et out there. You can stand on this ice right adjacent to this thin~ and good fishing. · Cnmie!: Well I don't want to see snowmobiles going by and trolling. workman: Lastly for me is the DNR releasing 80,000 fries in a lake that ,eezes out every year so the bullheads and carp can eat them? ~shworth: According to Todd, they really felt that they were going to be able to ~et this thing in. It's been the latest budget thing that jerked she ru~ from under them. We would not have gone so far as getting electrical down and getting everything ready to go but we assured we had %heir a~reement that this, it would go in. Go into this lake this year. ~-~ousin~ and Redevelopment Author£ty NovemDer 19. 1992 - Page 22 ~.~orkman: Friendly amendment to have the Mayor talk with Todd and other ~nan that, any other discussion? : RoDbzn~: I wanted to help also since I was on Park and Rec for 6 years and ha,/in~ been involved with Lake Susan originally when it started. I ~uess .~ust a question though. Just more with doing this with DNR, is it ~o~ible, and it's not even mentioned here but is it possible that ~hey~re looking at to doing that kind of access on Susan? Cnmiei~ There is. mean a public boat and everything else for launching. tnmiel: Yes. there is. [-:oDbins: I don't think there is yet. cnmiel: Yes. The access is there. ~oobins: The access is there but I think it's still states non- motorized. Chmiei: No. Because there are other motorized boats that are existing on the ].ake now of the property owners. Ashworth: You can put in a motorized boat. ~oboins: I withdraw the question. Gerhardt-' Just this last spring. There's a motion with a second. chmiel moved, Bohn seconded that the Housing and Redevelopment Authority authorize to fund an amount not to exceed $24,499.00 to purchase a lake aeration system for Lake Susan, and directing Mayor Chmiel and Charlie RoOoins to hold discussions with Todd Hoffman to alleviate any of the !iRa's concerns. Ali voted in favor and the motion carried. ~PPROVAL OF BILLS: Chmiei~ I'd move it with discussion. ~orKman: Is there a second? RoDbins: Second with discussion. ~orKman: Discuss away. Mayor. Chmiel: Just the one question on those special assessment payments that w~ had on County 17 for that $8~,923.00. Just clarify that a little bit more. d~rhardt: That's OUT special assessment reduction program. The pay as · =-ou co pro,ram similar to what we did with Target. That is their ~4ousinn and Redevelopment Authority November lg, lgg2 - Page 23 r~oaTment back for land write down based on the 3 year policy. Chmiel: Now is this south of TH 5? ~ernardt: Yes. This is the new facility off of Lake Drive. Just to the ~est of Roberts Automatic and to the north of Lake Susan Park. ~obDins: On mine, the Holmes and Graven. I thought we're no longer usinn them for legal practice is one. That's the first question. The other is, I'm assuming that the Guy Paterson was just a transfer cost. Transfer from one to the unit or is that buying our his land or what is that all about? Gerhardt: Guy Paterson was the final payment to him on the acquisition. ~-le was, you purchased the property for 313. I think he received _~omethin.~ iike 250. ~:oDOins: $o this was the residual left over? Okay, fair enough. ashworth: Generally we have not been usin~ Holmes and Graven. Referrin~ %o Roger's costs are less and I think if we get the contract documents out .... etc. We proceeded on that basis and one of the reasons is they"re cheaper is that means Todd and I handle the calls and negotiations with... I will be very truthful. Between Todd and I we were at our wits end with Target. They beat you up. It got to the point where Oici< walked out of my office and said, I'm not coming back and I said ~reat. That's the best news I've had all week. Later on I told ~odd I said, we shouldn't let this deal die. We're both just up to here wi~h those guys. We've got an existing policy. Here's how it works. Here's what you get and that's it. It sounds simple. It isn't. I got a boio of John Dean. I said, 3Chh if there's an opportunity to bring this tdin~ back together, I need to have a third party. I need to have a tnard Party who's skilled in negotiations. Holmes. and Graven are that. Rocer Ogee a very good job in terms of drafting the contracts, etc. Thew ~re not really negotiaters and you can thank Holmes and Graven for muttin~ that deal back in place. And it gave Todd and I an additional cushion because then as they yelled at Holmes and Graven, they could say well we need to check with Don and Todd and you know, kind of go through 5nat kind of a process which hadn't been necessary on some of the Empak and some of the other ones. But that deal just about didn't happen and ~ .~ust about didn't care. ~oDbins: And then on the payment to Jim Burdick for 13 grand. Is that a martial on the land? For Target land or what are we doin~ there? Gerhardt: With the purchase of his piece of property that we entered into back in the later part of the spring, early part of summer, we were to close by the middle of October. If we didn't close by October let or · % was before November let, we had to pay a penalty of half percent for t~e total Qurchase price. That is that penalty that half percent for November. RoObins: Okay. No other questions. ~iousin~ and Redevelopment. Authority November 19, 1992 - Page 24 Chmzel moved, Robbins seconded to approve the HR~ bills as presented. 41I voted in favor and the motion carried. f~obbins moved,'Workman seconded to adjourn the meeting. Oil voted in favor and the motion carried. The meeting was adjourned. submitted by Don Ashworth Executive Director Prepared by Nann Opheim